Okay.. This is complicated. There is a lot of information to go over but here is the shortest answer possible. Then we will dive a little deeper in details, and we still wont get all of them. Just bear with me. Bit coin is by it's formal definition: "Crypto-currency that has no mediators". Lets dissect that a bit. Crypto-currencies are like mathematical equations that are so complex you need a massively fast computer to comprehend it and solve it. The solution to the problem yields a specific answer, the answer is logged and checked against Bitcoin's database where there are only a total of 21 million. So in a nutshell think of Einsteins E=MC^2. Lets say before Einstein was able to solve this Bitcoin had the answer already and gave the answer intrinsic value, say $100. Which in the early 1900's was pretty decent! When Einstein finally did it he could bring the answer (E=MC^2) to Bitcoin's layer and ask them if he was right. They then say "yes that is correct" and then all of the sudden his answer has value.
That is the best I have for an analogy on Bitcoin. They are like extremely difficult equations that computers can solve and verify the validity of in order to make value of it. So. Here are a couple of super common questions since there is value to these (bits of data) there is the question of how it ends up as cold hard cash in your pocket.
Can I transfer bitcoins into my bank?
Bitcoins can't be transferred, withdrawn, or deposited into a bank. You can either sell them to someone who then transfers money into your bank account, or you can sell them at an exchange and just take out the funds from there. As you might have heard Bitcoin, and other Crytpo-currencies, are popular in the stock exchange. As time goes by the value goes up, and since there are a finite amount of coin to find the value will only ever go up.
What are they used for?
Really.. Just to have them. Before they exploded there was really no value to them. The reason people want to buy them is because they are extremely secure. However, with that being said, with a huge amount of money on the line it might be possible to fake a bitcoin. Think of it this way. Bits (like equations on a chalk board) can be mined using graphics cards, computers, and ASIC's*. If the equation looks good and yields the same result then it looks like it has validity. So who knows whats going to happen to the value of Bitcoin when there's nothing to mine.
How do I mine Bitcoin?
Mining is how the Bitcoin network keeps its transactions secure. As a reward for track and secure transactions using a way to solve the formulas, miners earn Bitcoins for each block of data they successfully validate. Miners are encouraged to use methods to validate securely. As time goes on, Bitcoins can be mined completely and thoroughly. You would need to use something with a lot of power, a graphics card, or many, are commonly used.* ASIC mining machines are geared to mine coins that are based on cryptographic hash function. So far, ASIC machines are the fastest and most secure way to mine now.
Can Bitcoin expire?
Yes. After a bitcoin is validated the data can become lost and never recovered because it cannot be re-validated. So as time goes on, there will be a finite amount of them, and they can be lost. Which only means that the value of the currency will go up. Once this was validated and hit the stock market it absolutely exploded because once the quantity starts to deplete, the value will absolutely skyrocket. It's like if Stradivarius told everyone he was only going to make 100 violins and they would definitely be worth millions someday. Would you buy one for $3,500? I would.
How many other currencies are there?
A lot. At the time of this article 19, and 4 years ago, 9. So who knows. The only problem is now that Bitcoin is understood, anyone can start making their own validation tools to do the same thing. This causes competition to lower the overall cost of Bitcoin, which may be a good thing because it's crazy expensive in the stock market right now.